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Mitsubishi Motors may not join the planned tie-up due to concern about its relatively small size. Picture: SUPPLIED
Mitsubishi Motors may not join the planned tie-up due to concern about its relatively small size. Picture: SUPPLIED

Japan’s Mitsubishi Motors, a junior partner of Nissan Motor, is considering not joining a planned merger between Nissan and Honda Motor, sources told Reuters on Friday.

Mitsubishi Motors planned to remain listed while continuing its co-operative relationship with both companies, three sources said on condition of anonymity because they were not authorised to speak about the matter publicly.

Shares of Mitsubishi Motors were down 3.9% by the lunch break after slumping more than 6% in early trade on Friday. Nissan shares lost 0.7% and Honda shares were trading 0.1% lower.

The development comes after Nissan and Honda last year said they would begin formal talks on a merger that could potentially create the world’s third-largest auto group with annual output of 7.4-million vehicles.

Mitsubishi Motors, in which Nissan is the top shareholder with a 24% stake, was expected to decide by this month whether it plans to take part.

Mitsubishi Motors said there had been media reports on the way it intended to participate in the business integration framework that Honda and Nissan were considering, but the reports were not based on information announced by the company.

It said it was considering different possibilities at this stage, and its direction had not yet been decided.

The Yomiuri newspaper reported earlier on Friday that Mitsubishi Motors was considering not joining the planned tie-up on the concern it would be difficult for it to affect management decisions of the joint holding company given its relatively small size.

When asked about Yomiuri’s report, spokespeople for Nissan and Honda referred to Mitsubishi Motors’ statement, without commenting further.

Nissan and Honda said in December they aimed to complete their talks in June this year before setting up a holding company by August 2026, when shares of both companies would be delisted.

Mitsubishi Motors would maintain its structure for now and focus on expanding its share in the Southeast Asian market, the Yomiuri report said.

Reuters

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